Bush Tax Cuts May Expire January 1: Homeowners of $1 M+ Properties Beware
Do you own a home valued over 1 million dollars? Beware! Congress may allow the Bush Tax Cuts to expire on January 1, 2013. What does this mean for homeowners of properties valued over $1,000,000? Capital Gains taxes may rise as high as 20% from the current 15%. CNBC reports that if these go into effect, wealthy home owners could owe millions of dollars more in taxes on their home sales. Because Bush Tax Cuts may expire January 1, Homeowners of $1 M+ Properties are contacting REALTORS across the country, hoping to get their home on the market and sold before January 1.
But don’t panic! Regardless of the rate rise, the $500,000 capital gains exclusion remains in effect. This means that, under the current federal Tax Code, any sales gain of $250,000 or less for single filers and $500,000 or less for married couples filing jointly will still be exempt from capital gains tax. So…is it time to rush right out and sell your $1,000,000+ property? Can you afford to take your time? The best way for you to make that decision is to call The Oetkens! We have our finger on the pulse of the North Idaho Real Estate Market, and we keep a close eye on the news, politics, and other factors that can have a major influence on the Coeur d’Alene Real Estate market. Let’s start by establishing the current market value of your property.
Call us today for a complimentary Comparative Market Analysis.
Once we establish the value of your property, then we can help you determine the wisest course of action based on your specific circumstances. We’re in the business of helping you Own The Lifestyle. We have proven strategies for optimizing your Real Estate Investment Portfolio, and we have the experience, education and expertise you can trust. Call us today! Call
For more information on our local Real Estate Market, visit
Ten Tax Tips for Individuals Selling Their Home
2011 HOMEOWNERS EXEMPTION INFORMATION
Kootenai County Assessor’s Office
451 Government Way
Coeur d’Alene, ID
WHAT IS THE HOMEOWNER’S EXEMPTION?
The Homeowners Exemption is an exemption provided by state law that saves the property owner money on their property taxes. This happens because the exemption deducts 1/2 of the assessed value of the buildings & the one acre home site, up to a maximum of
$92,040 or 50%, whichever is less.
This rate may be adjusted annually.
HOW DO YOU QUALIFY?
- A valid Idaho drivers license (if you drive)
- Vehicle is licensed in Idaho (if you own a vehicle)
- If the property is in a trust, bring the entire trust with you
- Registered Idaho voter (if you vote)
- If you file income tax; at the appropriate time the property owner
- Would file a full year Idaho resident income tax return
- You reside in Idaho for a majority of the year
WHEN DO I FILE?
- On new construction the owner must apply within thirty (30) days of purchase.
- On existing homes the deadline for applying is April 15th of the year that you occupied the home.
WHERE DO I FILE?
The Homeowners Exemption Applications are available, and must be filed in the Assessor’s Office. The Assessor’s Office is located at 451 Government Way on the main floor of the Administration building, next to the information desk.
FOR FURTHER ASSISTANCE ~
Call the Assessor’s Office at (208) 446-1513
Thank you, Pioneer Title Company for this timely information!
Mortgage Interest Deduction? OF COURSE!
We’re with Lawrence Yun, of the National Association of Realtors:
It’s a common misperception that the mortgage interest deduction benefits primarily the wealthy, as argued in the Washington Post’s January 1 editorial, “Trim the Excessive Tax Subsidy for Real Estate.”
In fact, the MID actually benefits primarily middle- and lower income families. Sixty five percent of families who claim the MID earn less than $100,000 per year, and 91 percent who claim the benefit earn less than $200,000 per year. As a percentage of income, the biggest MID beneficiaries are younger middle-class families.
The MID helps many families become home owners by reducing the carrying costs of owning a home. The ability to deduct the interest paid on a mortgage can mean significant savings at tax time. For example, a family who bought a home last year with a $200,000, 30-year, fixed-rate mortgage, assuming an interest rate of 5 percent, could save nearly $3,500 in federal taxes when they file next year. That’s real money they can use to pay down other debts, save for their children’s college education, or put away for retirement.
It’s no wonder, then, that most Americans support the MID. In fact, in a recent NAR survey by Harris Interactive of 3,000 home owners and renters, nearly three-fourths of home owners and two-thirds of renters said the MID was extremely or very important to them.
Unlike the very rich, much of whose wealth is tied to the stock market, the wealth of most middle-class American families is connected to their home. Millions of these Americans bought their homes with the understanding that mortgage interest is tax-deductible, and many of them have steadily paid down their mortgages to build equity in their home. Eliminating or reducing the MID would destroy part of this hard-earned equity for all home owners, independent of their tax filing status.
Furthermore, we also need to be mindful that home owners already pay 80 percent to 90 percent of U.S. federal income tax, and this share could rise to 95 percent if the MID is eliminated. Proposals that would remove certain tax benefits in return for lower tax rates just may hold for one or two terms of Congress before the tax rates are changed again. Americans are not naïve; they understand the nature of Washington politics.
For people who don’t have hundreds of thousands of dollars in savings to buy a home outright, tax benefits like the MID help them begin building their futures through home ownership…
We’d like to know what YOU think! Take our poll!
Comments are open, and we hope you’ll express your opinion! We’d love to hear from you.